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Record real estate prices predicted to continue in Hobart
Monday, 14 Nov 2016 10:13:15 | Angela Ross
Hobart's housing market is reporting premium prices. (ABC News: Angela Ross)
You've got to be quick off the mark to buy a home in Hobart, according to new homebuyer Nigel Honey.
Mr Honey has finally secured his dream house with views over the River Derwent and Mount Wellington, but it took two years.
"It got very disheartening when every house that we contacted we were told it was already sold," he said.
Much of the recent focus has been on Gen Ys feeling locked out of the market, but they are not the only ones with challenges.
To compete in the Hobart market, Mr Honey resorted to selling his house before buying so he could make a more attractive cash offer.
"You have to move fast otherwise you're going to miss out," Mr Honey advised.
The real estate agent who sold Mr Honey his home, Daniel ten Broeke, said half his listings were now selling within a week — a situation unheard of two years ago.
The average number of days a house was listed in Hobart has recently dropped from 90 to 58, according to the latest Corelogic data.
Real estate agents were also reporting premium prices.
Mr ten Broeke gave a recent example of a Lindisfarne house which received a dozen offers after being listed for one week.
"The sale price was $421,000 which is $26,000 above the top end of the range for a three bedroom, one bathroom property in Lindisfarne", he said.
Real Estate Institute of Tasmania president Tony Collidge said Tasmania had been recovering from a property downturn since 2012 and had just started achieving record prices for the first time since 2008.
"We had 16 property sales over $1 million for the last quarter ... two years ago you'd probably be looking at four or five," Mr Collidge said.
It is a trend particular to Hobart, with sluggish conditions still being reported in regional Tasmania.
Analysts believe a combination of low housing stock in Hobart, high rental yields and population growth are behind the strong market conditions.
"Its actually one of the few markets that are rising in terms of rents," said property analyst Nila Sweeny.
Stronger median price growth forecast
Prices are expected to continue breaking records, according to the latest Australian Housing Outlook prepared by BIS Shrapnel for QBE.
"For Hobart, the median house price is forecast to rise from $377,900 up to $425,000 in the next three years," said QBE's Phil White.
"That's actually a cumulative price increase of 12.5 per cent over a three year period, so that's very strong growth when you compare it to our forecasts for other cities around Australia."
This forecast growth of 12.5 per cent is higher than any other capital city, with Canberra the second highest at 8.5 per cent and Darwin, Melbourne and Adelaide all expected to experience negative growth between 2016 and 2019.
"As Sydney and Melbourne become more unaffordable, it does drive people to other cities which have more affordability" he said, adding Hobart was a popular choice for retirees.
Tony Collidge said he believes the Tasmanian Government needs to provide more assistance to first-home buyers who are struggling to get into the market.
"Offering a grant isn't the way to do it, because ultimately what happens is prices get jacked up, I think if you look at things like stamp duty relief," he said.
State Treasurer Peter Gutwein said the Government had no plans to reduce stamp duty and would instead continue to encourage home building.
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